Descubre el futuro de las finanzas en América Latina y el Caribe

The future of finance in LatAm & the Caribbean

O futuro das finanças na América Latina e no Caribe



Banking Revolutionized: How ‘As a Service’ Models Propel Growth in Fintech

Mar 15, 2024

By admin

'As a Service' models in banking and payments are not merely trends; they are pivotal forces reshaping the access to and delivery of financial technologies.


At the heart of this shift are scalable service platforms that transcend traditional barriers, enabling businesses to innovate and grow. Delving into this paradigm, we uncover how these services are empowering businesses to forge deeper customer relationships and streamline their financial operations.


An undeniable accelerant of time-to-market

“From E-commerce as a service to switch as a service, to card issuing as a service, a host of businesses around the globe are embracing the approach as a viable way to deepen customer relationships, control costs and generate revenue,” said Mariflor Alice, Regional Director Payments, Products and Services, LatAm at BPC. Such is the steady growth of as a service that worldwide end-user spending on public cloud services is expected to reach $597.3 billion in 2023 (up 21.7% from 2022).

“In the fintech sector, this growth is buoyed by not just by the rapid pace of innovation and the high bar placed on customer experiences, but the appeal of its value as an accelerator of time to market,” said Alice.


The Winning Solutions

E-commerce as a Service (EaaS) is redefining digital commerce, with the market projected to reach $6.3 trillion by 2023 and online sales poised to account for 21.2% of total retail by 2024, as per Insider Intelligence. This shift offers fintechs, financial institutions (FIs), and payment service providers (PSPs) substantial benefits, including streamlined operations and a smoother transition to digital platforms. WooCommerce leads the EaaS market with a 23% share, followed by Shopify at 20% in the top 1 million sites.

“These organizations need to reach deeper and wider into their customers to generate recurring revenue and to create a lasting, more sticky relationship,” said Alice.

Card Issuing and Management as a Service (CIMaaS) offers a turnkey solution for businesses to issue and manage payment cards, eliminating the need for in-house infrastructure development. This service includes advanced card features, robust security measures, and extensive customization options. BPC notes that integrating CIMaaS with core banking systems, CRM solutions, call centers, and Interactive Voice Response (IVR) systems enhances operational efficiency and customer engagement.

“Here the key is operational efficiency to issue,” says Alice, adding that the breadth of choices such as debit, credit, prepaid and virtual cards combined with the ability to deploy locally, and internationally for different purposes, makes this as a service laden with utility. Extrapolate these possibilities to loyalty, corporate, purchasing, fleet, gift or wallet and against your customer base and you begin to see an attractive value proposition, she added.

According to BPC, Acquiring as a Service is gaining momentum among PSPs, merchants, and TPPs. This cloud-based solution streamlines payment processing, inventory management, and CRM for merchants, marking a departure from legacy POS systems. The top 150 merchant acquirers worldwide, spread across 45 countries, processed 342.2 billion transactions in 2019, demonstrating the scale of the acquiring industry​.

The benefits of transitioning from legacy systems to cloud-based solutions like Acquiring as a Service for acquirers are manifold. They include scalability to handle growing transaction volumes, enhanced security features, and the ability to quickly adapt to market changes and regulatory requirements. Moreover, the integration with advanced cloud services can lead to significant cost savings and more efficient operations. One of the keys is what’s called terminal network management. A process that is infinitely more efficient as a service.


The importance of a trusted global partner

According to Alice, while it’s no secret that as a service has revolutionized how companies consume and utilize technology, the realization that it has reached and transformed some fairly well-understood, if not feared, financial technologies comes as a pleasant realization to businesses that would have ruled them out years earlier for their historical complexity and high cost of adoption.

The key, as with any partnership, is choosing the right partner. Headquartered in Baar, Switzerland and with more than 20 offices around the globe, BPC works with everything from tier-one banks to neobanks, payment service providers (PSPs), processors, government, transport operators, e-commerce players and merchants with a simple goal: enable people to pay, get paid, lend, loan, plan, buy, transit, travel -- and more.

Navigating the as a service landscape requires careful consideration and the expertise of a trusted partner, according to Alice: " "In the rapidly changing 'as a service' landscape, the key to success is choosing the right global partner. Leveraging their expertise leads to selecting apt solutions, optimizing technology investments for cost-effectiveness and ROI, and managing complexities like compliance and data security. This results in lower entry barriers, predictable costs, and quicker time-to-market, driving growth in the banking and payments technology sector," Alice concludes, highlighting the recent technology boom as unprecedented.


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